Kadant Inc · NYSE:KAI
Kadant — Q1 2020 Earnings Presentation
25 slides from Kadant's earnings presentation, Apr 29, 2020
Slide 1: First Quarter 2020 Business Review
Exhibit 99.2 First Quarter 2020 Business Review April 30, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements that involve a number of risks and uncertainties, including forward-looking statements about our future fin
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted diluted EPS, adjusted earnings before interest, taxes, depreciation, and amortizat
Slide 4: Business Review
BUSINESS REVIEW Jeffrey L. Powell | President & CEO KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 4
Slide 5: Operational Highlights
Operational Highlights • Safeguarding our workplaces and protecting the health and safety of our employees • All manufacturing plants are fully operational, serving the needs of our customers who are part of the critical infrastructure industry • Working closely with our supply chain to minimize any
Slide 6: Q1 2020 Performance
Q1 2020 Performance ($ in millions, except per share amounts) Q1 20 Q1 19 Change HIGHLIGHTS Revenue $159.1 $171.3 -7.1% Net Income $12.5 $10.9 +15.0 • Revenue was in line with expectations Adjusted EBITDA* $27.3 $30.0 -9.0% • COVID-19 led to shipment delays at end of quarter Adjusted EBITDA Margin*
Slide 7: Strategic Operating Segments
Strategic Operating Segments FLOW CONTROL INDUSTRIAL PROCESSING MATERIAL HANDLING • Fluid Handling and Doctoring, Cleaning, & • Stock Preparation and Wood Processing • Conveyors, Vibratory Feeders, Balers, and Filtration product lines product lines Fiber-based Products • Custom-engineered products,
Slide 8: Operating Segment Revenue
Operating Segment Revenue Fiber-based Material Handling Material Products, 2% Fluid Handling 12% Handling 19% 22% Stock Preparation Flow Control (Balers) 36% 8% Doctoring, Cleaning, Filtration 17% Stock Preparation 70% 61% 60% 55% 22% Industrial Wood Processing Processing 20% 42% 2019 AS REPORTED 20
Slide 9: Flow Control
Flow Control Custom-engineered products, systems, and technologies that control the flow of fluids HIGHLIGHTS $ in millions Q1 20 Q1 19 Change Revenue $57.1 $61.1 -6.5% • Strong bookings performance Bookings $67.7 $64.7 +4.6% Adjusted EBITDA* $14.9 $14.6 +2.4% • Parts and consumables revenue Adjuste
Slide 10: Industrial Processing
Industrial Processing Products used to recycle paper and paperboard and to process timber HIGHLIGHTS $ in millions Q1 20 Q1 19 Change Revenue $64.7 $72.3 -10.5% • Headwinds coming from China due to Bookings $65.8 $79.1 -16.7% economic slowdown, wastepaper ban Adjusted EBITDA* $12.6 $15.1 -16.6% • So
Slide 11: Material Handling
Material Handling Products used to handle bulk and discrete materials for secondary processing HIGHLIGHTS $ in millions Q1 20 Q1 19 Change Revenue $37.3 $37.9 -1.7% • Bookings were a record $42 million Bookings $42.0 $39.8 +5.6% Adjusted EBITDA* $6.9 $7.2 -4.0% • Strong demand for underground Adjust
Slide 12: Business Outlook: Second Quarter 2020 and FY 2020
BUSINESS OUTLOOK Second Quarter 2020 and FY 2020 KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 12
Slide 13: Financial Review
FINANCIAL REVIEW Michael J. McKenney | EVP & CFO KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 13
Slide 14: Q1 2020 Financial Performance
Q1 2020 Financial Performance ($ Millions, except per share amounts) HIGHLIGHTS Q1 20 Q1 19 • EPS exceeded high end of our guidance range Gross Margin 42.9% 41.2% SG&A % of Revenue 28.7% 28.8% • Adjusted EBITDA margin* of 17.1% Operating Income $19.7 $18.6 • Operating cash flows of $6.2 million Net
Slide 15: Key Consolidated Financial Metrics
Key Consolidated Financial Metrics GROSS MARGIN SG&A 42.9% 42.0% 42.8% 41.2% 40.9% 28.8% 28.7% 27.4% 27.1% 26.1% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 ADJUSTED EBITDA* CASH FLOWS $39.2 $35.5 $25.7 18.5% 18.6% $22.6 17.5% 17.6% 17.1% $23.6 $20.6 $9.9 $6.2 $7.7 $3.5 1Q19 2Q19 3Q19 4Q19 1Q2
Slide 16: 1Q19 to 1Q20 Adjusted Diluted EPS
1Q19 to 1Q20 Adjusted Diluted EPS* $2.00 $1.50 $0.04 ($0.34) $0.07 $0.09 $1.24 ($0.01) $1.09 $1.00 $0.50 $0.00 KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 16
Slide 17: Key Liquidity Metrics
Key Liquidity Metrics $ in millions Q1 20 Q4 19 Q1 19 Cash, cash equivalents, and restricted cash $62.1 $68.2 $57.2 Debt $289.5 $294.7 $354.8 Lease obligations $5.9 $6.3 $6.1 Net Debt $233.3 $232.8 $303.7 Leverage ratio1 2.04 2.03 2.33 Working capital % LTM revenue2 14.2% 12.2% 14.9% Cash conversion
Slide 18: Financial Review
FINANCIAL REVIEW Michael J. McKenney | EVP & CFO KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 18
Slide 19: Questions & Answers
Questions & Answers To ask a question, please call 888-326-8410 within the U.S. or +1 704-385-4884 outside the U.S. and reference 599 3005. Please mute the audio on your computer. KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 19
Slide 20: 2020 Key Priorities
2020 Key Priorities SAFEGUARD OUR MAINTAIN STRONG EMPLOYEES CASH FLOW MEET OUR OPTIMIZE OUR CUSTOMERS’ NEEDS LIQUIDITY KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 20
Slide 21: Thank You
Thank You INVESTOR RELATIONS CONTACT Michael McKenney, 978-776-2000 IR@kadant.com MEDIA RELATIONS CONTACT Wes Martz, 269-278-1715 media@kadant.com April 30, 2020
Slide 22: Appendix
APPENDIX First Quarter 2020 Business Review KAI Q120 Business Review–April 30, 2020 | © 2020 Kadant Inc. All rights reserved. 22
Slide 23: Adjusted Diluted EPS Reconciliation
Adjusted Diluted EPS Reconciliation Adjusted diluted EPS is a non-GAAP financial measure. Q1 20 Q1 19 Diluted EPS (earnings per share), as reported $1.09 $0.96 Acquisition Costs, Net of Tax - $0.06 Amortization of Acquired Profit in Inventory and Backlog, Net of Tax - $0.22 Adjusted Diluted EPS $1.0
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA in a given period by revenue in the same period. $ in thousands Q1 20 Q1 19 Net Income Attributable to Kadant $12,531 $10,900 Ne
Slide 25: Notes
Notes PRESENTATION NOTES • This presentation reflects our new reportable operating segments, as announced on the Form 8-K we filed with the U.S. Securities and Exchange Commission on April 22, 2020. Prior periods have been recast to conform to this presentation. • All references to EPS (earnings per